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Facebook's WhatsApp is so huge in India that one app reached 9 million users without spending a dime

Christina Farr
Getty Images. An imbalance in supply and demand is the cause of recent pain in the generics industry, said the head of the industry's trade group.

Emerging brands in the U.S. count on Facebook (FB) to promote themselves online. In India, they also rely on a Facebook service, but one that doesn't cost them anything—WhatsApp.

According to Mary Meeker's annual internet trends report published last month, WhatsApp is the most popular Android app in India, followed by Facebook Messenger at number two and the core Facebook service at number five.

With over 200 million users in India, WhatsApp is how digital health start-up 1mg went viral, even without founder Prashant Tandon having to spend any money promoting it. Since its launch in 2015, more than 9 million people have downloaded his app, which helps users research prescription drugs and find the lowest prices.

"One of our users created a long WhatsApp message on what a public service it was, and people just started sharing it," said Tandon, a graduate of Stanford Business School who returned to India in 2009 to build digital tools for the country's health care system. "We didn't do any marketing to get where we are."

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Facebook CEO Mark Zuckerberg took a massive gamble on WhatsApp in 2014, shelling out $19 billion for a wildly popular messaging service that generated almost no revenue. While WhatsApp is still early in proving out a business model, analysts at Pacific Crest Securities predict that in coming years each active user could produce at least $2 of revenue per month.

Tandon's entrepreneurial endeavors started with his first company HealthKart, which sold health and wellness products online. He spun out 1mg from HealthKart after noticing that there was a big price differential between the various generic medicines in India. He figured he could point consumers to the cheapest option.

Tandon expected that it would be reasonably popular, as most people in the country have an incentive to check pricing as they buy their drugs out-of-pocket. He pulled together information about medicines from books, pamphlets, and distribution records.

Developers for 1mg then put that database on an app, later adding a transaction component so consumers could use it to buy prescription drugs, order diagnostic tests and consult with a physician online. That proved to be particularly appealing to those in rural areas with little access to doctors.

The company's rapid growth attracted investment from Silicon Valley's technology investors. Maverick Capital, Sequoia Capital and Omidyar Network invested in a $16 million round last year.

"1mg has the potential to be the pervasive healthcare app for India," said Shailesh Lakhani, an India-based investor with Sequoia Capital.

The app now gets 65 million page views per month, said Tandon, making it one of the largest digital health companies in the region.

It also an option to upload a prescription to the app via a smartphone photo. And as a reminder that 1mg is an e-commerce company, the medicine is delivered straight to the user's doorstep.



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